UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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(Mark one) |
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ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2003 |
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OR |
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission file number: 000–27127 |
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iBasis, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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(State
or other jurisdiction of incorporation or |
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04-3332534 |
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(I.R.S. Employer Identification No.) |
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20 Second Avenue, Burlington, MA 01803 |
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(Address of executive offices, including zip code) |
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(781) 505–7500 |
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(Registrant’s telephone number, including area code) |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
As of November 5, 2003, there were 44,759,614 shares of the Registrant’s Common Stock, par value $0.001 per share, outstanding.
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PART I — FINANCIAL INFORMATION |
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Page |
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Item 1 — |
Unaudited Condensed Consolidated Financial Statements |
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Condensed Consolidated Balance Sheets at September 30, 2003 and December 31, 2002 |
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4 |
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5 |
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6 |
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8 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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35 |
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35 |
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35 |
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37 |
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38 |
iBasis, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
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September 30, |
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December 31, |
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Assets |
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Cash and cash equivalents |
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$ |
16,948,104 |
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$ |
32,316,609 |
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Accounts receivable, net of allowance for doubtful accounts of approximately $5.7 million and $7.8 million, respectively |
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19,069,318 |
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20,853,573 |
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Prepaid expenses and other current assets |
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4,534,070 |
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5,374,390 |
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Total current assets |
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40,551,492 |
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58,544,572 |
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Property and equipment, at cost: |
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Equipment under capital lease |
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20,465,501 |
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19,480,591 |
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Network equipment |
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55,487,296 |
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54,548,467 |
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Computer software |
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8,060,580 |
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6,624,530 |
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Leasehold improvements |
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6,361,990 |
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6,272,493 |
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Furniture and fixtures |
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1,052,670 |
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1,047,249 |
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91,428,037 |
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87,973,330 |
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Less: Accumulated depreciation and amortization |
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(71,753,921 |
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(55,615,839 |
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Property and equipment, net |
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19,674,117 |
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32,357,491 |
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Deferred debt financing costs, net |
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393,571 |
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1,381,927 |
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Long term investment in non-marketable security |
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5,000,000 |
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5,000,000 |
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Other assets |
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831,531 |
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1,240,321 |
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Total assets |
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$ |
66,450,711 |
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$ |
98,524,311 |
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Liabilities and Stockholders’ Deficit |
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Accounts payable |
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$ |
13,318,070 |
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$ |
13,142,280 |
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Accrued expenses |
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19,488,407 |
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18,147,455 |
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Deferred revenue |
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1,052,601 |
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— |
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Current portion of long-term debt |
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2,880,213 |
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5,348,852 |
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Total current liabilities |
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36,739,291 |
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36,638,587 |
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Long term debt, net of current portion |
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66,149,597 |
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93,589,694 |
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Other long term liabilities |
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3,102,363 |
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2,268,455 |
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Total liabilities |
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105,991,251 |
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132,496,736 |
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Commitments and contingencies |
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Stockholders’ deficit: |
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Common stock |
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45,895 |
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45,785 |
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Preferred stock |
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— |
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— |
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Treasury stock; 1,135,113 shares at cost |
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(340,534 |
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(340,534 |
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Additional paid-in capital |
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370,378,467 |
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368,927,164 |
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Deferred compensation |
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— |
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(85,756 |
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Accumulated deficit |
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(409,624,368 |
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(402,519,084 |
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Total stockholders’ deficit |
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(39,540,540 |
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(33,972,425 |
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$ |
66,450,711 |
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$ |
98,524,311 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
iBasis, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
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Three Months Ended September 30, |
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2003 |
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2002 |
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Net revenue |
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$ |
44,032,007 |
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$ |
38,358,442 |
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Costs and operating expenses: |
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Data communications and telecommunications |
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38,502,395 |
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33,442,350 |
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Research and development |
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2,892,527 |
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4,372,799 |
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Selling and marketing |
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1,877,521 |
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2,280,133 |
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General and administrative |
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1,227,963 |
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3,648,205 |
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Depreciation and amortization |
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4,266,996 |
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6,897,090 |
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Non-cash stock-based compensation |
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28,585 |
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149,021 |
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Loss on sale of messaging business |
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— |
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(135,196 |
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Restructuring costs |
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— |
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(393,143 |
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Total cost and operating expenses |
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48,795,987 |
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50,261,259 |
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Loss from operations |
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(4,763,980 |
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(11,902,817 |
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Interest income |
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30,041 |
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167,610 |
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Interest expense |
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(801,338 |
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(1,792,973 |
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Gains on bond repurchases and exchanges |
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— |
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2,435,478 |
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Other expenses, net |
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(97,500 |
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(101,279 |
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Loss from continuing operations |
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(5,632,777 |
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(11,193,981 |
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Loss from discontinued operations |
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— |
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(531,664 |
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Net loss |
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$ |
(5,632,777 |
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(11,725,645 |
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Basic and diluted net loss per share: |
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Loss from continuing operations |
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$ |
(0.13 |
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$ |
(0.25 |
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Loss from discontinued operations |
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— |
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(0.01 |
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